Property Market

When you hear about a rising property market, remember it’s not the house rising in value. The house can only depreciate.

It’s the land the house sits on that goes up in value. It’s important to look at the property market from a land perspective. The land around the services and infrastructure most people want to live close to is fixed in supply.

What influences the property market?

The property market is not subject to the same laws of competition. It will sell for the highest prices that the economy can afford to pay for that location value. In other words land will always soak up any of society’s gains.

That’s why here at Markets & Money our property experts keep their fingers on the pulse of Aussie land prices.

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air rights
Paved Paradise and Put Up an Apartment Block
‘Air rights’ weren’t a thing in Australia until a few years ago. Even then, it mirrored the US, where air rights were mostly protecting the space around important buildings. Of course, things change. Now air rights mean something more than just views. Instead of paving paradise and putting a parking lot, the new twist is to rip up the parking lot and put in an apartment block.
interest rates could go lower
Get Ready for Even Lower Interest Rates
National Australia Bank has a consensus view that the RBA will start increasing the cash rate around August. But there’s a problem with that line of thinking. Just because rates have been at records lows doesn’t mean they can’t go any lower. For one, there’s the Aussie property market to think about.
real estate mcdonald's property
The McDonald’s Fortune Founded on Real Estate
The McDonald brothers explained that franchisees find land in a prime position, take out a lease, and borrow funds for construction. Who’d have thought the founder’s success in getting started came not from the sale of burgers but from the value in the land on which the burgers were made?
Australian property market
How to Own Almost 200 Properties
It’s not the number of properties that makes you rich; it’s the percentage you own. For example, imagine two investors. One owns 20 properties, the other owns three. Who’s better off? To decide, we need more information.
Construction boom
Australia’s Economic Achilles Heel
Today’s article was originally published on 18 August. It looks at Australia’s weak wage growth, optimistic Reserve Bank, and what could be our greatest economic weakness.
Aussie Property Has Nothing on Hong Kong
Aussie Property Has Nothing on Hong Kong
Think Aussie property is seriously overvalued? Then you’ll think property in Hong Kong is ridiculous! Hong Kong dwelling prices have climbed 11% this year. And that’s coming off continuous growth since 2009.
investing dilemma
An Investor’s Major Dilemma in Today’s Markets
You may have heard of the ‘prisoner’s dilemma’. It’s a standard example in a branch of economics called game theory. Well nowadays, the classical models of economics taught in universities have proven to be poor models of reality. Which brings us to the investor’s dilemma today.
Why the RBA Has to Cut Interest Rates
Without consumption signalling that everything is OK, I don’t believe there’s any way the RBA will be raising interest rates. In fact, I think they’ll have to cut rates, regardless of concerns about high house prices.